Each share of phantom stock represents a right to receive the value in cash of one share of Arch Coal, Inc. common stock. The shares of phantom stock are held by the executive officer through the Arch Coal, Inc. Deferred Compensation Plan (the "Plan"). The shares of phantom stock acquired by the executive officer represent dividends attributable to amounts that the executive officer elected to defer under the Plan into a hypothetical investment in shares of Arch Coal, Inc. common stock.

(2)

Shares of phantom stock are payable in cash on the date or dates elected by the executive officer, subject to the terms of the Plan. The executive officer may transfer any and all of the phantom stock account into an alternative investment account at any time.

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